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Date: 20 July 2023

Author: Eleanor Collins

There are lots of ways that eco-conscious developers can make their properties more ‘green’. But why should developers focus on building more sustainable homes?

At present, homes are responsible for 16% of carbon emissions in the UK and the building industry as a whole accounts for 25% of the UK’s total carbon footprint. It doesn’t have to be this way.

In 2021, the UK Green Building Council launched a roadmap to help the government and building industry achieve ‘Net Zero’ status by 2050. Their recommendations included retrofitting existing homes, introducing mandatory energy performance disclosure on all non-domestic buildings, and adopting a ‘design for performance’ approach for all new buildings.

Retrofitting millions of properties will be no easy feat. It’ll only get more challenging if buildings continue to be made without sustainability in mind. So if you’re eager to do your bit for the environment, tackle the rising cost of living and see some sizeable business benefits, read on.

Environmental benefits

Green buildings have two primary objectives. The first is to reduce or eliminate negative impacts on the environment by using less energy and more natural resources. The second is to increase their positive impact on the environment, by generating their own energy or increasing biodiversity.

What qualifies as a green building varies from one country to the next. In the UK and across the EU, EPC ratings provide a framework for healthy, efficient and energy-saving buildings. Having a more sustainable home lowers the amount of CO2 emitted into the atmosphere. An analysis completed by the ONS in October 2022 showed that the average CO2 emissions for existing, older properties were more than double that of new houses.

Savils estimate that for each EPC grade a house climbs up, carbon emissions are reduced by 30-40%. Which will over time have a large impact on the environment.

Many developers may be able to charge a premium if they’re able to present their builds as greener than others.

According to a large scale study completed by Barclays and Ipsos in May 2023, 47% of homeowners would pay a premium for a home that had already undergone energy-efficiency-related modifications.  Additionally, those with a current home valued between £500k-£900k would be willing to pay £30k more for the same sized property.

Lower energy bills

With the rising cost of living and global energy crisis becoming a concern for many households around the world, building more sustainable homes has the potential to put more money in both homeowners’ and renters’ pockets.

Solar panels, for example, can knock between £297 to £729 a year off a typical household’s energy bills. This figure is more likely to be at the higher end of the scale from October onwards when the price cap increases further.

Energy bills can be reduced by using cavity wall insulation, roof insulation, air source heat pumps and a smart thermostat.

Developers may get left behind if they are unwilling to invest in sustainability.

Society is becoming increasingly energy conscious, the cost of living continues to rise, and governments are under pressure to compete with other nations’ sustainability commitments. So, it seems likely that the demand for green properties will continue to grow. This could leave those developers who are unwilling to invest in sustainability at a disadvantage.

But for now, with few developers really investing heavily in green builds, there’s a real opportunity to stand out from your competitors. You can do this by exploring more sustainable building materials, being more conscious of the amount of energy you’re using during the construction process and investing in people who’ve worked on green developments before.

Many people assume that green buildings are more expensive to construct, but according to The Business Case for Green Building report, developers can often keep costs low during the design and construction process.

Adopting green strategies and budgeting for them at an early stage, hiring experienced design and construction teams, and using an Integrated Design Process (IDP) from pre-design through to post-occupancy all help to reduce costs.

If done correctly, sustainable homes can be built with lower design and construction costs

Future-proofing your company

As the world becomes more aware of the impact of climate change and governments tighten energy efficiency criteria, the costs associated with non-compliance can be significant.

While green building is largely optional at present, there may come a time when sustainable homes are the standard. Buildings that don’t meet a certain set of sustainable credentials may become unsaleable.

If you’ve already sold your developments, this might not be an immediate concern, but do you want properties that are in desperate need of retrofitting to be part of your company’s legacy?

Green construction has the potential to completely transform the way we live, work and learn.

By thinking ahead and investing in more sustainable construction, developers can help to delay climate change, create more sustainable communities, and drive economic growth.

Do you have a sustainable development you’re looking for finance on?


Fill in the enquiry form to speak with Louise or another one of our property finance experts today.

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